"We must look beyond Afghanistan to the sources of terrorism. We must destroy terrorist sanctuaries beyond Afghanistan, dismantle the elaborate networks in the region that recruit, indoctrinate, train, finance, arm, and deploy terrorists. We must ensure that political currents and entities in the region are not allowed to use extremism as an instrument of policy."

Hamid Karzai President of the Islamic Republic of Afghanistan Statement, 61st UN General Assembly New York, September 20, 2006

Terrorism remained a problem in the region, directly and indirectly threatening American interests and lives. To varying degrees, U.S. cooperation with regional partners on counterterrorism issues continued to increase, but much is left to be accomplished.

Despite considerable progress in Afghanistan, the Taliban-led insurgency remained strong and resilient, particularly in the Pashtun south and east. Although the insurgency absorbed heavy combat losses, its ability to recruit foot soldiers from its core base of rural Pashtuns remains undiminished.

Pakistan executed effective counterterrorism cooperation and captured or killed many terrorists. In August, close cooperation between Pakistani, British, and American law enforcement agencies exposed the London-Heathrow bomb plot, leading to the arrest in Pakistan of Rashid Rauf and other conspirators believed to be connected to the case. However, the United States remained concerned that the Federally Administered Tribal Areas (FATA) of Pakistan are a safe haven for al-Qaida, the Taliban, and other militants.

Terrorists staged numerous attacks in India, including a series of commuter train bomb attacks in Mumbai which killed over 200 people and injured more than 700. Despite challenges associated with its law enforcement and judicial systems, India achieved major successes this year, including numerous arrests and the confiscation of explosives and firearms. Neighboring Bangladesh continued to arrest extremists, but the deteriorating political situation in Bangladesh may increase the opportunity for terrorists to find refuge or transit.

In Nepal and Sri Lanka, terrorism carried out by the Maoists and the Liberation Tigers of Tamil Eelam (LTTE) posed a severe challenge to those governments. On an encouraging note, in November, the Maoists signed a peace agreement with the Government of Nepal that provided, under certain disarmament conditions, that the Maoists could be admitted into an interim government. In Sri Lanka, the LTTE continued attacks including targeted assassinations against political and military opponents.

A sustained commitment to counterterrorism by Central Asian states resulted in relatively few terrorist attacks. Yet terrorism and the underlying conditions and porous borders it exploits still pose a significant threat to the region. In May, terrorists attacked border posts in Tajikistan and Kyrgyzstan but were subsequently killed and captured by joint operations in the Ferghana Valley. With U.S. support, Central Asian states have undertaken to improve the capabilities of their border forces and build new border posts to impede terrorist movements and interdict drug smuggling, some of which financed terrorism in the region. The sheer length of the border and local corruption remained obstacles in Central Asia's efforts to control its borders. More widely, popular grievances over governance and poor economic growth enhance conditions terrorists and other extremists could exploit to recruit and operate in the region.

Central Asia's most notorious terrorists are the Islamic Movement of Uzbekistan (IMU) and a splinter group, the Islamic Jihad Union (IJU ). However, radical extremist groups such as Hizbut-Tahrir (HT) may also present a danger to the region. HT, an extremist political movement advocating the establishment of a borderless, theocratic Islamic state throughout the entire Muslim world, has followers in Kyrgyzstan, Kazakhstan, Tajikistan, Uzbekistan, Germany, the United Kingdom, Turkey, and the Middle East. The United States has no evidence that HT has committed any acts of international terrorism, but the group's radical anti-American and anti-Semitic ideology is sympathetic to acts of violence against the United States and its allies. HT has publicly called on Muslims to travel to Iraq and Afghanistan to fight Coalition Forces.

AfghanistanAfghanistan continued its progress toward building a stable and democratic government, despite a strong Taliban offensive and an increase in suicide bombings and attacks on soft targets throughout the country. Programs designed to combat the Taliban and other lawlessness were the principal focus of the Afghan government and international community.

At year's end, the Program for Strengthening Peace and Reconciliation (PTS), which worked to reconcile Taliban and Hizb-i-Islami Gulbuddin (HIG) members, had eleven regional offices, and over 2,500 former Taliban fighters and other insurgents had left the battlefield and joined the program. Plans were underway to strengthen and expand PTS, provided sufficient funding was available. The Disarmament, Demobilization, and Reintegration (DDR) program processed more than 63,000 former combatants in 2005, and 380 in 2006, as the program successfully wound down in June. The Disbandment of Illegal Armed Groups (DIAG) began work in June 2005 vetting parliamentary candidates to ensure they had no ties to illegal armed groups (IAGs). The DIAG disqualified a number of candidates, using the program more as an effort to push compliance rather than to punish individuals for past and present actions. The program's second phase began in early 2006, and undertook a province-by-province effort to identify and remove government officials with links to IAGS and disband the most notorious IAGs. Progress has been slow because of a lack of government enforcement of mandatory compliance and the unwillingness of many to disarm given the security situation.

Coalition Forces, in particular the U.S.-led Combined Joint Task Force-76, conducted a series of sub-campaigns during 2006. These actions utilized effective counterinsurgency means and methods, including the simultaneous use of kinetic (air and ground forces) and non-kinetic means to counter terrorism, extremism, and anti-government forces. This regional strategy, focusing on the south and east, destroyed many anti-government forces and attempted to restore the flow of reconstruction and development. Coalition Forces killed over 2,000 anti-government forces and provided hundreds of millions of dollars in reconstruction and development aid.

Increasingly, the rapidly professionalizing Afghan National Army (ANA), with more than 31,000 personnel trained and equipped, and to a lesser extent the Afghan National Police (ANP), with 61,500 trained and equipped, have taken the lead in counterterrorism operations and cooperated closely with the U.S. Afghan security forces have arrested presumed terrorists, disrupted several IED cells, and prevented many bombings, particularly in Kabul.

Despite this progress, the Taliban-led insurgency remained a capable and resilient threat to stability, particularly in the Pashtun south and east. Although the insurgency absorbed heavy combat losses, its funding and ability to recruit foot soldiers from its core base of rural Pashtuns remained undiminished. This was due in part to aggressive Taliban propaganda. Taliban information operations have grown increasingly sophisticated. Seemingly reliable streams of Taliban financing from various sources, including collusion with narcotraffickers responsible for 92 percent of the world's opium supply, as well as safe haven in the FATA across the border in Pakistan, have allowed the insurgency to strengthen its military and technical capabilities.

Afghanistan saw an increasing number of violent incidents during 2006. More than 1,400 civilians were killed in terrorist attacks during the year. The use of IEDs and suicide bombings in Afghanistan increased fourfold. Militants launched approximately 130 suicide attacks this year. Insurgents targeted provincial governors, NGOs, women's affairs officials, and ministry buildings and officials during the year. Insurgents increased their use of IEDs and suicide attacks against Coalition Forces, NATO/ISAF, Afghan National Security Forces, and Government of Afghanistan targets, while maintaining a steady level of direct and indirect fire attacks against these same forces.

Overall attacks against non-combatants (government officials, civilians, religious figures, teachers, and students) appeared to increase, and international NGOs, UN workers, and recipients of NGO assistance were attacked on approximately 57 occasions. Thirty-one NGO staff members were killed compared to 33 in 2005 and 23 in 2004. Insurgents targeted Provisional Reconstruction Teams and construction crews in a possible effort to hamper reconstruction and drive the international assistance community out of Afghanistan.

BangladeshBangladesh continued to arrest, prosecute, and convict top leaders and activists of Jamaatul Mujahedin Bangladesh (JMB), the banned Islamic extremist group responsible for a wave of bombings and suicide attacks in late 2005. In response to the attacks, the government's Rapid Action Battalion, a paramilitary organization, emerged as Bangladesh's lead counterterrorism unit responsible for the arrests of significant numbers of JMB leaders and activists. Although JMB remnants have threatened violence if the death sentences of JMB leaders under appeal are carried out, there was no JMB-linked violence in 2006. In September, authorities arrested four members of another banned terrorist organization, Harakat ul-Jihad-I-Islami/Bangladesh (HUJI-B), two of whom confessed involvement with the 2004 grenade attack that severely injured the British High Commissioner, the 2005 assassination of opposition Awami League elder statesman Shah Kibria, and three attacks on two other Awami League leaders.

The Government of Bangladesh stated that it intended to close permanently the local office of the radical Kuwait-based Revival of Islamic Heritage Society, but has yet to do so. The Central Bank of Bangladesh fined Islami Bank for violating anti-money laundering laws in connection with possible financing of JMB activities. Islami Bank has a number of board members who are associated with the Jamaat Islami Party, a member of the ruling coalition.

India continued to allege that the United Liberation Front of Assam (ULFA) and other anti-India insurgency groups operated from Bangladesh with the concurrence of senior Bangladeshi government officials. The Government of Bangladesh strongly denied these allegations. Nonetheless, the arrest in India of two Pakistanis linked to the Mumbai train bombings who allegedly entered India from Bangladesh underscored how porous the Indo-Bangladeshi border is. The absence of counterterrorism cooperation between India and Bangladesh fueled mutual allegations that each country facilitated terrorism inside the borders of the other.

U.S. and Bangladeshi law enforcement agencies cooperated well on several cases related to domestic and international terrorism. With U.S. technical assistance, Bangladesh drafted an improved anti-money laundering law, and put into operation basic elements of a Financial Intelligence Unit. Bangladesh also continued cooperation with the United States to strengthen control of its borders and land, sea, and air ports of entry.

IndiaAs in previous years, terrorists staged hundreds of attacks on people and property in India. The most prominent terrorist groups were violent extremists operating in Jammu and Kashmir; Maoists operating in the "Naxalite belt" in eastern, southern and central India; and ethno-linguistic nationalists in India's northeastern states. The federal and state governments tried various strategies to address some of these grievances within the context of Indian democracy, but the government was firm: groups must cease violence before negotiations can begin, and the government will not entertain territorial concessions.

India alleged, based on numerous arrests and several major attacks, that UN designated Foreign Terrorist Organizations (FTOs) began a campaign in the Indian heartland to gain support from India's minority Muslim population for terrorist attacks. The Indian government blamed two prominent Pakistani-based FTOs, Lashkar-e-Taiba (LT) and Jaish-e-Mohammad (JEM), for several attacks in major Indian cities.

On July 11, terrorists set off seven blasts on packed commuter trains in Mumbai, killing at least 209 people and injuring more than 700. On March 7, terrorists set off three blasts in the holy city of Varanassi, killing 21 and injuring 62 people. On September 9, terrorists set off a series of blasts outside a mosque in the western Indian city of Malegon that killed 38 people and wounded more than 50. Police claimed the Malegon attack was conducted by Islamic extremists hoping to incite further anger between the Hindu and Muslim communities.

On October 27, Karnataka state police in Mysore arrested two suspected terrorists who allegedly belonged to the terrorist group Al-Badr. Police believed the suspects were inserted as an advance team to establish a base in southern India from which they would facilitate terrorist attacks on economic and government targets, especially in nearby Bangalore, a high-tech hub.

In addition, terrorist groups continued their attacks in Jammu and Kashmir against Indian and Kashmiri politicians, civilians in public areas, and security forces. Hundreds of non-combatants were killed, most of whom were Kashmiri Muslims. Indian experts asserted that the July 11 attack that killed eight tourists and injured 43 in Srinagar was designed to inhibit growth in the tourism industry and to hamper increasing Kashmiri enthusiasm for normalization of ties with New Delhi and between Indian and Pakistani controlled Kashmir. Unfortunately, Kashmir continued to be a dangerous area as an American citizen was injured in a grenade attack in Srinagar in June. Indian officials said that terrorist infiltration into Jammu and Kashmir increased in 2006, although they also pointed to an overall decline in violence and infiltration since 2000.

Naxalite (a Maoist agrarian peasant movement) terrorism, which covered a broad region of eastern, central, and southern India, grew in sophistication and lethality. Naxalites launched several high-level attacks, raising the insurgency's profile, and expanded the rural territory under their control. On July 17, at least 25 people were killed, 80 injured, and approximately 250 people were missing following an attack by some 800 armed Naxalites in the Dantewada district of Chhattisgarh.

The United Liberation Front of Assam (ULFA), an ethnic separatist group, conducted multiple terrorist attacks against civilians and security forces in the Northeastern Indian state of Assam resulting in numerous deaths and injuries. In one of the more violent series of attacks attributed to ULFA, on November 5 several bombs exploded in a crowded market and at an oil refinery in Assam's capital city Guwahati, killing 12 people and injuring a few dozen.

In Manipur, a Northeast Indian state affected by over 20 insurgent groups, two American citizens were seriously injured on August 16 in a grenade attack on a Hindu temple in the capital, Imphal. Four people died, including two children, and 34 were injured. An ethnic Meitei separatist group, Kanglei Yawol Kanna Lup (KYKL), was suspected to have been the perpetrator.

Indian security agencies and the police in Tamil Nadu remained active to prevent infiltration into the state by members of the Liberation Tigers of Tamil Eelam (LTTE) who were engaged in violent conflict with the army in neighboring Sri Lanka.

U.S. Government and military cooperation with India on counterterrorism continued to expand. In October, a company of U.S. Marines traveled to India for a counterterrorism exercise with the Indian army. In September, the Indian Army sent a company to Hawaii to train with U.S. Army Pacific forces. In August, the Indian Army sent two experts to observe a military exercise in Hawaii.

The U.S.-India Counterterrorism Joint Working Group (CTJWG) has met eight times since its creation in 2000. India also participated in CTJWGs with 15 other countries, and in multilateral CTJWGs with the EU and BIMSTEC (an organization promoting economic cooperation among Bangladesh, India, Myanmar, Sri Lanka, Thailand, Bhutan, and Nepal).

The Indian government supported ongoing U.S. investigations in cases involving American citizens that were victims of terrorism. On April 26, in part due to U.S. evidence, a special court in Kolkata convicted seven men for the January 2002 attack on the American Center in Kolkata that left five Indian police officers dead and over 20 injured.

India's counterterrorism efforts were hampered by its outdated and overburdened law enforcement and legal systems. The Indian court system was slow, laborious, and prone to corruption; terrorism trials can take years to complete. An independent Indian think tank determined that the thousands of civilians killed by terrorism in Jammu and Kashmir from 1988 to 2002 received justice in only 13 convictions through December 2002; most of the convictions were for illegal border crossing or possession of weapons or explosives. Many of India's local police forces were poorly staffed, trained, and equipped to combat terrorism effectively. Despite these challenges, India scored major successes this year, including numerous arrests and the seizure of explosives and firearms during operations against Lashkar-e-Taiba and other terrorist groups.

KazakhstanKazakhstan continued to aggressively combat terrorism and extremism locally and strengthened its cooperation and timeliness in sharing information with the United States. There was little movement, however, on counterterrorism legislation. The draft law on money laundering that the government has worked on since 2005 remained stalled in Parliament.

In January, authorities arrested a number of individuals from two extremist cells in Almaty on terrorism charges. Eight of those arrested remain in prison with trials ongoing. In November, authorities arrested eleven people from a terrorist group in Stepnogorsk and confiscated arms, explosives, and extremist printed materials. According to press reports, members of the terrorist group were planning hostage sieges, lethal attacks on state employees, and several explosions. In December, three Kazakhstani nationals were returned to Kazakhstan from the Guantanamo Bay detention facility.

Kazakhstan continued to face a growing problem with the Islamic extremist group Hizb'ut Tahrir (HT). HT remained outlawed as an "extremist" organization through the Law on Extremism and continued to be the only group so designated under this law.

In November, the Government of Kazakhstan added the East Turkistan Liberation Organization and Aum Shinrikyo to the national list of banned terrorist organizations, accusing these groups of using terrorist means in an attempt to achieve an independent state in Central Asia and in China, respectively. The list of banned groups also included al-Qaida, the East Turkistan Islamic Party, the Kurdish People's Congress, Asbat al-Ansar, the Muslim Brotherhood, the Taliban, the Boz Gurd, Jamaat of Central Asian Mujahadins, Lashkar-e-Tayyiba, the Social Reform Society, the Islamic Movement of Uzbekistan, and its splinter group, the Islamic Jihad Union.

In July, Kazakhstan became an initial partner nation in the Global Initiative to Combat Nuclear Terrorism. Kazakhstan was one of the first countries to endorse and participate in the Global Initiative after its inception.

Kazakhstan, along with China, Kyrgyzstan, Russia, Tajikistan, and Uzbekistan, is a member of the Shanghai Cooperation Organization, which established a Regional Antiterrorism Center in Tashkent. Kazakhstan is also a member of the CIS Collective Security Treaty Organization and the Eurasia Group, a regional anti-money laundering organization modeled on the Financial Action Task Force, which has as its objective the integration of Kazakhstan, Belarus, China, Kyrgyzstan, Tajikistan, Russia, and Uzbekistan into the global system of anti-money laundering and combating the financing of terrorism.

KyrgyzstanThe Republic of Kyrgyzstan took new political, legislative, and law enforcement steps to disrupt terrorism. Since 2001, Kyrgyzstan has hosted the Operation Enduring Freedom Coalition airbase at Manas International Airport near Bishkek. In October, Kyrgyzstan adopted an antiterrorism law that authorized an antiterrorism center to coordinate state agencies and facilitate international cooperation. In November, President Bakiyev signed a comprehensive law on "Counteracting Terrorist Financing and Legalization (Money Laundering) of Proceeds from Crime." The law authorized the establishment of a Financial Intelligence Unit (FIU), and obligates financial institutions to report any suspicious activity and bank transactions that exceed the threshold amount of $25,000.

Kyrgyzstan's military and internal forces worked to improve their counterterrorism capabilities and to expand cooperation with regional partners. Kyrgyzstan is a member of the Shanghai Cooperation Organization (SCO) and the Central Asian Cooperation Organization (CACO), which established lists of banned terrorist groups in an effort to streamline cooperation.

On May 12, an attack on Tajik and Kyrgyz border posts in the southern Batken region left six Kyrgyz servicemen and civilians dead. Kyrgyz authorities blamed the attack on Islamic militants crossing from Tajikistan. In response to a request from the Kyrgyz government following the attack, the United States provided $280,000 in radio and communication equipment to the Kyrgyz Border Guards in December to help improve their operational effectiveness in the mountainous border regions. In addition, the United States is funding $5 million in infrastructure improvements for the Kyrgyz Border service in the southern regions.

During the summer, Kyrgyz security services conducted operations in southern Kyrgyzstan against alleged terrorists from banned groups such as Hizb ut-Tahrir and the Islamic Movement of Uzbekistan (IMU). A July 14 raid killed five suspected IMU militants near Jalalabad. In September, a raid on the home of the alleged leader of the Islamic Movement of Turkestan, Rasul Akhunov, resulted in his death; authorities later claimed that Akhunov died of a heart attack.

Hizbut-Tahrir (HT) has been banned in Kyrgyzstan since 2003. Local specialists estimate that there are more than 5,000 HT members in Kyrgyzstan, located primarily among Kyrgyzstan's ethnic Uzbek population in the south but with growing support in the north as well. Kyrgyz authorities continued to report seizures of HT leaflets and small arms.

NepalThrough April 2006, Nepal's primary counterterrorism focus remained the Maoist insurgency but the focus shifted dramatically after Nepal's political parties, the Maoists, and civil society led a popular uprising against the King. King Gyanendra was compelled to restore parliament and cede his authoritarian powers to a government run by an alliance of the seven main political parties. The Maoists declared a unilateral cease-fire on April 27. The government followed suit on May 3, formally lifting its designation of the Maoists as a terrorist organization. Months of negotiations resulted in a comprehensive peace agreement on November 21 that formally ended the insurgency. The agreement also provided that the Maoists would be admitted into an interim government once Maoist combatants were in camps and relinquished their weapons under UN monitoring.

From January to November, Maoist rebels were responsible for the deaths of 165 security personnel and 46 civilians. During the same time period, the government killed 182 suspected Maoist militants. Nepal's National Human Rights Commission (NHRC) reported that murders by Maoists lessened after the cease-fire in April, but still totaled 28 from May until November. Security force killings of Maoist insurgents were also significantly lower after the cease-fire, totaling nine during the same period.

Despite the cease-fire, Maoist rebels continued to conduct abductions, extortion, and violence. In the Kathmandu Valley, Maoists took advantage of their dramatically increased presence and the government's reluctance to upset the peace process to expand their use of extortion and efforts to undermine trade unions and student groups affiliated with the political parties. They also continued forced recruitment of schoolchildren, with thousands targeted after the signing of the initial November 8 peace accord. On September 20, and again on December 19, the Maoists declared nationwide transportation strikes. Both events were accompanied by the stoning of vehicles, and each lasted only for the declared period, demonstrating Maoist command and control.

This year also saw the beginning of a disturbing new trend with the activation of the separatist Maoist-splinter terrorist group called the Janatantrik Terai Mukti Morcha (JTMM), which aimed to bring about the secession of the southern Terai plains from the rest of Nepal. This group was responsible for the assassination of a Nepali Member of Parliament in September.

"Imperialist" United States and "expansionist" India were the targets of considerable Maoist venom, especially in the period leading up to the April uprising. A trip by Maoist Supremo Prachanda to New Delhi on November 18, however, seemed to mark the culmination of a shift in the Maoist view of Nepal's large neighbor to the south. At the end of the year, the United States was the only country to maintain its designation of the Maoist insurgency as a terrorist organization. Several countries, including India, were waiting for the Maoist entry into government to authorize open contacts at all levels.

The United States provided substantial antiterrorism assistance and training to Nepal's security forces, including courses on crisis management and critical incident management.

PakistanThe Government of Pakistan is a frontline partner in the War on Terror. Nevertheless, Pakistan remains a major source of Islamic extremism and a safe haven for some top terrorist leaders. Credible reports estimated that as many as 900 Pakistanis lost their lives in more than 650 terror attacks in 2006, with another 1,500 people seriously injured. Pakistan has experienced attacks from international terror networks such as AQ and its supporters, as well as violence stemming from Sunni-Shia sectarian strife and militant sub-nationalists. Attacks occurred with greatest frequency in the regions bordering Afghanistan: Balochistan, the North West Frontier Province (NWFP), and the adjacent Federally Administered Tribal Areas (FATA).

Al Qaida's continued calls for the overthrow of President Musharraf remained a threat to Pakistan, despite the government's efforts to eliminate AQ elements. Pakistan continued to pursue AQ and its allies aggressively through nationwide police action and military operations in the FATA. Despite having approximately 80,000 troops in the FATA, including Army and Frontier Corps (FC) units, the Government of Pakistan has been unable to exert control over the area.

Pakistan Army and FC units have targeted and raided AQ and other militant safe havens in the FATA. In November, a suicide bomber killed 43 Army recruits and injured more than 40 others at a Pakistani military training facility in Dargai, NWFP, in retaliation for raids on AQ installations.

Operations throughout the year against both AQ and Taliban command and control capabilities helped disrupt support for the anti-Coalition insurgency in Afghanistan and anti-militant activity in Pakistan. In the early part of the year, recognizing that military operations alone would not restore security and stability to the FATA, President Musharraf directed governmental agencies to devise a comprehensive strategy to accelerate economic and social development, strengthen political administration and enhance security in the region. By year's end, the FATA Sustainable Development Plan was undergoing a final review before being presented to the Pakistani public and international community.

Pakistani security services cooperated with the United States and other nations to attack terrorism both within Pakistan and abroad. Hundreds of suspected AQ operatives have been killed or captured by Pakistani authorities since September 2001. Close cooperation between Pakistani, British and American law enforcement agencies exposed the August London-Heathrow bomb plot, leading to the arrest in Pakistan of Rashid Rauf and other alleged conspirators connected to the case. Pakistani authorities arrested two suspects in the March bombing of the U.S. Consulate in Karachi, which killed American diplomat David Foy and two others and injured more than 50 bystanders.

Pakistan's leaders took steps to prevent support to the Kashmiri militancy and denounced acts of terrorism in India, including bombings in Varanasi in March and Mumbai in July. Meeting in September on the margins of the Non-Aligned Movement Summit in Havana, President Musharraf and Indian Prime Minister Manmohan Singh agreed to establish an Anti-Terrorism Mechanism to coordinate bilateral exchange of information on terrorist threats.

Armed conflict between the national government and militant Baloch nationalists escalated, culminating in the August 26 death of Nawab Akbar Khan Bugti1 during a raid by security forces on his mountain hideout. The "Balochistan Liberation Army" (BLA) claimed responsibility for dozens of terror attacks on government offices and economic infrastructure in the province, as well as in neighboring Sindh and Punjab. The government declared the BLA a terrorist organization in April. In addition to violence related to the militant Baloch nationalists, a series of bomb attacks in the provincial capital of Quetta followed police actions against suspected Taliban fighters in the last quarter of the year.

Sectarian violence, a scourge in Pakistan for more than two decades, claimed hundreds of lives, although the total number of sectarian terror attacks continued to decline for the second year in a row. A suicide bomber killed over two dozen and injured approximately 50 people participating in a February 9 Shia religious procession in Hangu, NWFP. On April 11, at least 57 people were killed in a bombing of a gathering of Sunni (Barelvi) religious leaders in Nishtar Park, Karachi. Although media reports blamed intra-Sunni Muslim sectarian rivalry, the results of the government's investigation have not been made public.

President Musharraf remained a forceful advocate for his vision of "enlightened moderation," calling on Pakistanis to reject extremism and terrorist violence. The government's crackdown on banned organizations, hate material, and incitement by religious leaders continued unevenly. Madrassa registration, foreign student enrollment in madrassas, and financial disclosure requirements remained a source of friction between government and religious leaders.

Although Pakistan continued to work with the UNSCR 1267 Committee to freeze the assets of individuals and groups identified as terrorist entities linked to AQ and the Taliban, several UN-sanctioned entities continued to operate. An anti-money laundering bill introduced into the National Assembly in September 2005 remained under consideration in 2006. Adoption of anti-money laundering legislation consistent with international standards would significantly broaden Pakistan's ability to cooperate internationally on counterterrorism finance issues. Pakistani customs officials continued to enhance controls to interdict bulk cash couriers at key ports of entry to prevent unregulated cross-border cash flows, which are a potential source of terrorism funding.

Pakistan's courts, including the Anti-Terrorism Court (ATC), presided over several high-profile terror-related cases. Prosecuting terrorism cases presented considerable challenges for the government, which obtained convictions in some cases but suffered reversals in others. On May 22, the Rawalpindi ATC sentenced four men to death and ordered life imprisonment for three others for their part in a July 2004 plan to assassinate Prime Minister Shaukat Aziz. On May 30, a Multan ATC judge sentenced Lashkar-e-Jhangvi activist Qari Omar Hayat to death on 16 counts of murder for a 1999 attack on a Shia prayer gathering. On November 23, the Sindh High Court reversed the convictions of nine Harkat-ul Mujahideen members for killing three during the May 2004 bombing of the honorary Macedonian Consulate in Karachi.

The United States and Pakistan engaged in a broad range of counterterrorism cooperative efforts including border security and criminal investigations, as well as several long-term training projects. A Joint Working Group (JWG) on Counterterrorism and Law Enforcement, established in 2002, convened in Washington, DC in April to assess ongoing efforts and discuss enhanced cooperation.

Sri LankaThe 2002 cease-fire between the Sri Lankan government and the Liberation Tigers of Tamil Eelam (LTTE), a designated Foreign Terrorist Organization, continued to erode amidst numerous violations and escalating military engagement between the LTTE and government security forces. The Sri Lankan Army remained deployed across the country to fight the insurgency. The paramilitary Special Task Force (STF) police were deployed both in the east and in strategic locations in the west.

The LTTE conducted a campaign of targeted assassinations against political and military opponents. This included the April assassination attempt of Sri Lanka Army Commander General Sarath Fonseka and the assassination of the Army Third-in-Command; the August 12 assassination of the Government of Sri Lanka's Secretariat for the Coordination of the Peace Process, Deputy Director Keteshwaran Loganathan; and the December 1 suicide bomber's attempt on the life of Defense Secretary Gothabaya Rajapaksa, the President's brother. The Karuna faction, a dissident faction of the LTTE, conducted its own assassination campaign against the LTTE and pro-LTTE civilians in the east.

Following the assassination of Foreign Minister Kadirgamar in August 2005, the government enacted emergency regulations giving arrest power to members of the armed forces, who were required to turn suspects over to the police within 24 hours. Individuals arrested under the emergency regulations may be detained for up to one year. Under these regulations, 148 persons were arrested; most have already been released. A revised Prevention of Terrorism Act (PTA), enacted in December, strengthened these powers.

The LTTE financed itself with contributions from the Tamil Diaspora in North America, Europe, and Australia, and by imposing local "taxes" on businesses operating in the areas of Sri Lanka under its control. Using this money, LTTE weapons were purchased on the international black market or captured from the Sri Lankan Army. Many LTTE innovations, such as explosive belts, vests, and bras, using female suicide bombers, and waterborne suicide attacks against ships, have been copied by other terrorist groups.

In general, the LTTE did not target U.S. citizens or assets, limiting attacks to Sri Lankan security forces, political figures, civilians, and businesses. However, two suicide bomb attacks on VIP motorcades in Colombo occurred within half a mile of the U.S. embassy on roads frequently traveled by Embassy employees.

Sri Lankan cooperation with the FBI has resulted in arrests of persons charged with material support to terrorist groups.The Sri Lankan government cooperated with U.S. efforts to track terrorist financing, although no assets were identified. The United States also provided training for relevant Sri Lankan government agencies and the banking sector. The government cooperated with the United States to implement both the Container Security Initiative and the Megaports program at the port of Colombo.

TajikistanSharing a 1,400-kilometer border with Afghanistan, Tajikistan offered its limited resources to assist the United States with Operation Enduring Freedom almost unconditionally. Following the deployment of U.S. troops to Afghanistan, Tajikistan allowed its territory and air space to be used for counterterrorist actions. The Tajik government's main impediment to counterterrorism performance remained its lack of resources. The fact that Tajikistan remained the poorest of all the former Soviet republics, and the ninth poorest country in the world in per capita GDP, puts these funding issues into context.

Tajikistan is not known to harbor terrorist groups, but extremists have transited Tajikistan to and from Afghanistan and Pakistan through the porous 1,400 kilometer Tajik-Afghan border. The United States spent over $5.8 million in 2006 to train and equip the Tajik Border Guards, improve border fortifications, and related capacity-building assistance. These measures will help stem the flow of potential terrorists attempting to cross the border and allow Tajikistan to better monitor its own borders.

Tajikistan prohibited extremist-oriented activities and closely monitored terrorist groups like the Islamic Movement of Uzbekistan (IMU) and extremist groups like Hizbut-Tahrir (HT). The Government of Tajikistan believed HT was active in the Ferghana Valley. The Tajik legal system convicted 32 alleged HT members (19 men and 13 women) in 2006. Analysts believed that the IMU also operated in Tajikistan. Recent press reports indicated that Tajik authorities arrested 30 suspect IMU members in Tajikistan; figures were not available regarding how many of them have been convicted. Tajik authorities arrested five additional alleged IMU members in Isfara. During a search of their house, police claimed that they found 80 kilograms of ammoniac nitrate and four kilograms of aluminum powder.

In May, a small group of armed bandits attacked Tajik and Kyrgyz border posts. The fighters seized several weapons, including 17 Kalashnikov assault rifles, a PK light machine-gun, and 3,000 rounds of ammunition. The date of the attack coincided with the one-year anniversary of the Andijan uprising in Uzbekistan leading authorities to suspect that the IMU was responsible for these attacks. Kyrgyz security services killed four militants during the attack and arrested one other. Tajik authorities later convicted seven IMU members for their participation in the attacks.

Tajikistan participated in the counterterrorist activities of the Shanghai Cooperation Organization (SCO), the Commonwealth Security Treaty Organization (CSTO), and the CIS Counterterrorist Center.

TurkmenistanWhile the Government of Turkmenistan strictly controlled access into and passage through Turkmenistan at official border crossings and along main roads, clandestine passage could not be eliminated because of the extended border through mountainous and desert terrain, as well as the small size and uneven quality of Turkmenistan's border guard, customs service, and law enforcement agencies. Turkmenistan government officials exert stringent security control over the country. The Government of Turkmenistan strictly controlled religious expression, and radical or extremist forms of Islam were not tolerated. The military-style counterterrorism unit with hostage rescue and explosives threat management capability, inaugurated in 2005, and the Department for the Prevention of Terrorism and Organized Crime in the Ministry of Internal Affairs, were used largely to investigate and harass real or perceived opposition to the regime, relatives of those implicated in the 2002 coup attempt, religious groups, and non-governmental organizations. The Government of Turkmenistan supported humanitarian assistance related to the War on Terror and Operation Enduring Freedom in Afghanistan. The government entered the names of individuals and organizations on terrorist financing lists into its banking system.

UzbekistanThere remained a clear potential for Islamic extremism and acts of international terrorism in Uzbekistan. Supporters of terrorist groups such as al-Qaida, the Islamic Movement of Uzbekistan (IMU), the Islamic Jihad Union (IJU), and the East Turkistan Islamic Movement (ETIM), were active in the region. Members of these groups expressed anti-U.S. sentiments and have attacked U.S. interests in the past, including a 2004 suicide bombing at the U.S. embassy in Tashkent, which was clamed by the Islamic Jihad Group (IJU), now the IJU. U.S. Government personnel and facilities continued to operate at a heightened state of alert.

The Government of Uzbekistan did not provide safe haven for terrorists or terrorist organizations. However, the country's poor economic climate and repressive government policies created conditions in which large portions of the population were increasingly susceptible to extremist ideologies. Uzbekistan's porous borders, particularly in the Ferghana Valley, allowed for people and illicit goods to move in and out of the country with relative freedom. The government responded to these threats with even more repressive actions against regime opponents and those it deemed to be religious extremists. However, it failed to address the conditions terrorists might exploit to gain popular support and recruits for their cause.

Although Uzbekistan was among the first states to support U.S. efforts in the War on Terror, the Government of Uzbekistan ended virtually all counterterrorism cooperation with the United States in mid-2005. In November 2005, the United States fully vacated, at Uzbekistan's request, the Karshi-Khanabad airbase. Authorization for U.S. aircraft to overfly Uzbekistani territory ended in January 2006, although an agreement was signed in November allowing Department of Defense-contracted civilian aircraft to overfly Uzbekistan on a fee-per-flight basis.

Tashkent hosted the Shanghai Cooperation Organization's (SCO) Regional Antiterrorism Center Secretariat (RATS), which claimed to have begun to focus on operational activities such as developing a coordinated list of terrorist groups and facilitating joint counterterrorism exercises among SCO member states. In the past, the government participated in UNODC and OSCE programs aimed at ensuring that it enacted appropriate terrorism legislation. However, Uzbekistani participation in these programs has virtually ended, and the government has made little progress in this regard.

1 Nawab Akbar Khan Bugti was rebel leader of the Balochistan nationalist movement and played a major role in Pakistani politics for decades.